Effective Use Of Coupons For Customer Recovery

The Case for Coupons

The Case for Coupons

Since the "Great Recession" of 2009, coupon usage has been growing as Americans sought ways to reduce expenses. The coupon clippers are no longer just thrifty moms sifting through Sunday morning's paper, but now also include everyone from students to executives. A 2009 Nielsen report reveals that 41% of coupon "enthusiasts" are from households with incomes more than $70,000. Although most coupon redemptions are from newspaper advertisements, the philosophy of penny-pinching among all demographics is clear-cut. A 2010 Forrester report closes the gap from brick-and-mortar to e-commerce when it states that cost is the most important issue in two of the top three reasons U.S. online shoppers don't complete a purchase. With more consumers perceiving the internet as the new bargain basement, it doesn't come as a surprise that 27% of shopping cart abandoners leave to compare prices on other sites. (Forrester)



Coupons & Customer Recovery

Historically, coupons have been used as a tactic for increasing foot traffic and increasing revenue. Traditionally coupons that were mailed or inserted into the Sunday times would increase awareness and incentivize the purchase, but with the tracking now inherent to internet marketing, coupons are be used by all types of online retailers to reduce site abandonment and recover otherwise lost sales. Some of the more popular methods for employing coupons for customer recovery include behavioral remarketing, email remarketing and abandonment engagement. Each have their advantages and disadvantages, however this articles focuses on the ways to minimize risk and maximize revenues when incorporating a coupon campaign with these remarketing methods.



Combatting Coupon Abuse

It's important to note that some coupon leakage is somewhat inevitable. Simple word-of-mouth is common with a strong coupon and there aren't currently any technical processes with the ability to prevent friends from telling each other that an online retailer allows a specific coupon code for an added discount. There are, however, some key best practices online businesses should implement when incorporating a coupon strategy into their customer recovery campaigns.



The easiest way to prevent widespread coupon abuse is to present the coupon to the online shopper in the form of a unique link. Almost all coupon or daily deal sites, such as coupon cabin or detailcatcher, require the user to provide a coupon code, making a submission virtually impossible. When eBusinesses chose an abandonment engagement strategy to deliver a coupon, there is a small possibility that the actions required to 'unlock' this discount may be posted on the web. This type of coupon leakage is easily combatted by only displaying the coupon to targeted site visitors. Site abandonment solution providers always allow for business rules to identify and ignore repeat customers. If a potential coupon-distributer returns to the website and is unable to trigger the coupon launch, they will most likely assume the incentive was a one-time or limited-time offer, and prevent mass distribution or learned purchase behavior. All-in-all the simple act of not displaying a coupon code and incorporating intelligent engagement rules is the best method of preventing potential coupon-sharers from leaking any discounts or incentives across the web.

When providing a unique link isn't available to an online retailer, the next best option is to offer dynamic coupon codes that can only be applied once, or have avery limited shelf-life. This method, however tends to be rather costly and requires a great deal of upkeep. To augment the preventative measures eBusinesses should take to prevent coupon abuse, it is also considered a best practice to emphasize that the coupon is a limited time offer. Messaging such as 'For Today Only,' or 'Limited Time Offer' explicitly state the limited availability of the offer and effectively discourages widespread distribution.

Coupons are a double-edged sword, when implemented with an experienced vendor, they can work to maintain average order values, increase online conversions and build brand loyalty. However, when integrated carelessly, they can be highly detrimental to customer purchase patterns and negatively affect the bottom line.

by: UpSellit

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